EXHIBIT 5

                 OPINION AND CONSENT OF WALKERS (CAYMAN ISLANDS)

                              [WALKERS LETTERHEAD]

                                                     DIRECT DIAL: (345) 814 4635
                                                   EMAIL: RPALMER@WALKERS.COM.KY

4 February 2005

United America Indemnity, Ltd.
Walker House, 87 Mary Street
P.O. Box 908GT
George Town, Grand Cayman
Cayman Islands

Dear Sirs:

We have examined the Registration Statement on Form S-8 to be filed by United
America Indemnity, Ltd., a Cayman Islands exempted company (the "Company"), with
the Securities and Exchange Commission on or about 4 February 2005 (the
"Registration Statement"), relating to the registration under the Securities Act
of 1933, as amended, of 183,211 Class A common shares, par value $0.0001 per
share, of the Company (the "Shares") for issuance pursuant to the Penn-America
Group, Inc. 2002 Stock Incentive Plan (the "Plan").

As Cayman Islands counsel to the Company, we have examined the corporate
authorizations of the Company in connection with the Plan and the issue of the
Shares by the Company and have assumed that the Shares will be issued in
accordance with the Plan and the resolutions authorizing their issue.

It is our opinion that the Shares to be issued by the Company have been duly and
validly authorized, and when issued, sold and paid for in the manner described
in the Plan and in accordance with the resolutions adopted by the Board of
Directors of the Company and when appropriate entries have been made in the
Register of Members of the Company, will be legally issued, fully paid and
non-assessable.

We consent to the use of this opinion as Exhibit 5 to the Registration Statement
and further consent to all references to us in the Registration Statement and
any amendments thereto.

Very truly yours,

WALKERS